IPW: 91 Percent Of People Don't Know Tax Incentives In The Property Sector

Illustration. (Photo: Perumnas)

JAKARTA - Indonesia Property Watch (IPW) CEO Ali Tranghanda said tax incentives in the form of VAT (Value Added Tax) exemptions for the property sector were deemed ineffective in boosting demand from the public.

The reason is, most of the public is not aware of this program considering the lack of socialization, both by the government and the developer.

Ali obtained this fact based on a survey related to the enthusiasm and influence of implementing VAT relaxation in the housing sector.

"As many as 91 percent of the public are not aware of this relaxation policy," he said as quoted by VOI, Tuesday, March 20.

In fact, said Ali, the government's efforts to discount tax collections for residential types worth up to Rp 5 billion have been running for almost a month. Moreover, the time span for this policy is relatively short, namely until 31 August.

"Of course, this is homework that must be completed immediately by all stakeholders, especially if the urgency to be achieved is the acceleration of national economic recovery, it must be completed as soon as possible," he said.

Ali added, from the poll conducted it was also revealed that 24 percent of the public who knew that the relaxation of the property sector VAT had an impact on the enforcement of 0 percent DP for taking new housing units. Meanwhile, the rest had no knowledge of this government program at all.

Furthermore, this survey also reveals that 53 percent of respondents think that the trend of low interest rates has no effect on mortgage interest rates. Meanwhile, another 23 percent thought that mortgage interest was still high. Meanwhile, the rest, or around 24 percent, said that the mortgage interest rate was quite low.

To note, in early March the government through the Minister of Finance Sri Mulyani granted VAT exemptions for consumers who want to buy existing properties or have completed the construction period and are not indent units.

This strategy is expected to boost consumption and production in the housing sector amidst the economic downturn during the pandemic.

"This is valid for six months from March 1 to August 31," he said in the Press Statement on the Incentives for Motor Vehicles and Housing which was held with several related ministers Monday, March 1.

Meanwhile, this facility can be provided to consumers by meeting two requirements. First, it must be a type of landed house or flat with a maximum selling value of Rp. 2 billion and will be given a VAT exemption of up to 100 percent.

Second, landed houses or flats with a sale value of between Rp. 2 billion to Rp. 5 billion will be given a 50 percent VAT exemption.

Then, another requirement that must be fulfilled is that each person can only buy one type of property within a period of one year, and cannot be resold within one year. Then, it does not apply to pivot properties and must be a handover of the building from the developer to the owner.

"We provide this incentive to also consider other factors, such as employment and other industrial sectors related to this sector, which are expected to revive," he said.